Appeals Court Rejects Effort to Create Hybrid Taxi Fleet

The Bloomberg administration’s years-long attempt to force the city’s cab owners to switch from gas guzzlers to hybrid vehicles was rejected by a federal appeals court Tuesday morning.

The Court of Appeals for the Second Circuit upheld a judge’s 2009 ruling, in a suit brought by taxi fleet owners, that the city’s rules amounted to an effort to mandate fuel economy and emissions standards, something that only the federal government is allowed to do.

If the city wants to appeal further, the next stop is the United States Supreme Court. A Law Department spokeswoman said officials were “reviewing our options.”

The city’s effort to force the changeover from the ubiquitous Ford Crown Victorias, which get 12 to 14 miles a gallon, to hybrids and other cleaner cars that get much better mileage dates to 2007, when the city issued a rule that all cabs put into service beginning October 2009 achieve at least 30 city miles per gallon.

After a federal judge blocked that rule, the city rolled out another, in March 2009, based on financial incentives. That rule allowed fleet owners to raise their lease rates to drivers by $3 per shift for hybrids and other clean cars, but forced them to drop their rates $12 per shift for Crown Victorias, creating a $15-per-shift difference between gas cars and hybrids.

The board of trade sued again, arguing that the $12-per-shift loss in income added up to cost owners around $6,000 per year for each Crown Victoria, a burden so great that it amounted to a de facto mandate to purchase a hybrid. (Fleet owners did not, however, object to being allowed to raise rates $3 per shift for hybrids. They did so immediately.)

In June 2009, the same judge, Paul A. Crotty of Federal District Court in Manhattan granted the preliminary injunction the board of trade requested, agreeing with the board of trade that the city’s rules were preempted under both the federal Energy Policy and Conservation Act (also known as the E.P.C.A.) and the federal Clean Air Act. A preliminary injunction is granted when a judge considers that a plaintiff’s argument is likely to succeed.

The city’s appeal to the Second Circuit sought to strike down the injunction. In court papers, the city said its new rules, rather than usurping the federal government’s authority to regulate fuel efficiency, corrected “a structural problem with the standard vehicle lease arrangement that artificially insulates fleet owners from fuel costs.”

The Second Circuit did not seem impressed. It wrote in Tuesday’s decision:

The requirement that a taxi be a hybrid in order to qualify for the upwardly adjusted lease cap does nothing more than draw a distinction between vehicles with greater or lesser fuel-efficiency.

Under the rules, the court added, “‘hybrid’ is simply a proxy for ‘greater fuel efficiency.’” As to the city’s argument that the board of trade’s case was not likely to succeed, the Second Circuit was unequivocal.

The city’s new rules, based expressly on the fuel economy of a leased vehicle, plainly fall within the scope of the E.P.C.A. preemption provision. The plaintiffs, therefore, have demonstrated a likelihood, indeed a certainty, of success on the merits.

In a statement, the city’s chief lawyer, Michael Cardozo, its corporation counsel, said:

We are very disappointed with the decision. We do not believe that Congress intended for the Clean Air Act or the Energy Policy and Conservation Act to prohibit local governments from implementing incentive programs that encourage the purchase of environmentally friendly taxis. Both laws were designed to reduce air pollution – which is exactly what moving to fuel efficient cabs would do.

Currently, 3,715 taxis in the city, or about 28 percent of the total fleet, are hybrids or other clean-air vehicles.

The board of trade, which applauded the decision, called it “an opportunity to work with the Taxi and Limousine Commission on achieving a taxi fleet that is safe, durable, affordable and fuel efficient.”

Senator Gillibrand and Rep. Nadler have introduced the Green Taxis Act in Congress. This bill would allow cities to set fuel economy and emissions standards above federal requirements and effectively overrule this decision.

Ford will discontinue Crown Vic production next year. Other manufacturers are making more fuel efficient cars that are already being put into taxi service.

Bloomy needs to take a breath and stop trying to save the world and instead focus on the things he is in charge of, namely the increasing crime rate and the impending collapse of NYC’s public transit system.

God forbid there should be more efficient cars than the huge, ugly Crown Victorias. In fact, why not sue and get the steam-powered trains back, too. There seems nothing in this lawsuit to suggest any willingness to take advantage of this “opportunity to work with the Taxi and Limousine Commission on achieving a taxi fleet that is safe, durable, affordable and fuel efficient,” but rather just self-interest, greed and short-term thinking.

Not being a lawyer, I need some clarification about this ruling. Does the power to preempt environmental protection by the federal government come from the “Commerce Clause”? Why wouldn’t the power of state to protect the health of its citizens by reducing pollution come under its police powers?

@1 – California is grandfathered out by the federal legislation, because its legislation was already on the books when Congress enacted their scheme. Other states have the option of adopting the stricter California rules, but cannot adopt other rules themselves.

That said, this seems like a pretty ridiculous ruling, as it is not a question of regulating the fuel economy of vehicles sold in New York, but regulating the fuel economy of a small subset of heavily regulated vehicles operated by consent of the City. If you want to operate a taxi in New York, you have to comply with all sorts of regulations, most recently accepting credit cards. But the City cannot require that the vehicles used as taxis actually have decent gas mileage or low emissions? That’s just insane and overreading the federal statute.

Who’s running the city’s legal department, one of those rich kid interns? Regardless of the merits of the plan, the administration should have seen this decision coming and not spent our tax money defending an obviously hopeless cause in the courts.

I support saving on gas fuel but I can’t fit into the back seat of a Ford Escape Hybrid. I’m 6’3″ and I CANNOT get into this car without banging my head or straining my neck into pain. If a Ford Escape stops, I refuse to take it and I wait for a Crown Vic.

If this trend for smaller cars (smaller back seats) continues, I may not be able to take a taxi in NYC. I’m not sure what I will do and I worry about this.

The board of trade’s comment speaks to its pocketbook and little else. The hybrid advantage is more about clean air than fuel economy. While mileage may go up as much as 100 percent or more, the pollutants reduction is significantly greater.
In Europe a Financial Times report comparing cars on the basis of pollutants found a quantum leap of cleanliness from the euro high mileage cars to the honda and toyota hybrids.
And there is another consideration. The internal combustion engine of a hybrid works less, and most importantly, at the rpm range, the idle, where most engines produce most of their wear and tear.
In a city as congested as NYC the benefits of hybrid mean much more than simply better mileage. If the board of trade had to pay for the consequences of dirty taxi air, which we all pay for, it might suddenly become socially responsible.

The key to good regulation, as well as one that will pass the pre-emption doctrine in this case, is that instead of mandating a result (fuel effeciency, or its proxy, hybrid cars), the government should create incentives for the people to make the desired choice themselves. In other words, increase the price of gas. When the cost of gas cuts into profits, cab owners will buy fuel effecient cars on their own. Blanket rules of universal applicability are over broad and wasteful.

And, of course, never, never, allow a fuel surcharge. This undermines the entire cost structure for buying fuel effecient cars in the first place.

Bloomberg should respond to this by lowering the $3 per shift increase that he gave fleet owners for hybrids, which amounted to a windfall so that he is no longer providing the de facto mandate that the Court is rejecting. Then the City should simply refuse to renew license of fleet operators that do not switch over to hybrids and let them try and sue the city on the grounds that the non-renewal was because the City mandated hybrids…. The City also needs to forbid these Pakistanis from talking on their cell phones, even if they are using hands-free!

“the city’s rules amounted to an effort to mandate fuel economy and emissions standards, something that only the federal government is allowed to do.”

seriously?

what happened to states’ rights?

can you explain the history of why california can set standards and nobody else can? what is there in the constitution, or federal law that restricts states from setting stronger standards than the federal government?

Well, if the Crown Vics are being discontinued, could the city not phase them out some other way? Say by rules for number of miles on the odometer or maintenance or something. I seem to remember that’s what (sadly) doomed the Checker cabs.

My understanding is that the legal basis for the federal Clean Air Act is the interstate commerce clause. Setting fuel economy standards for cars sold throughout the US would on its face fall within interstate commerce. How New York City’s taxis are “interstate commerce” is somewhat less clear to me.

The first comment asks about California’s separate rules and how the feds respond to those. California was given special authority to impose their own stricter emissions requirements. I believe the reason was that California had its own standards, and a severe air pollution problem, prior to the US government establishing regulations.

What's Next

Looking for New York Today?

New York Today is still going strong! Though no longer on City Room, New York Today continues to appear every weekday morning, offering a roundup of news and events for the city. You can find the latest New York Today at nytoday.com or in the morning, on The New York Times homepage or its New York section. You can also receive it via email.

Lookin for Metropolitan Diary?

Metropolitan Diary continues to publish! Since 1976, Metropolitan Diary has been a place for New Yorkers, past and present, to share odd fleeting moments in the city. We will continue to publish one item each weekday morning and a round-up in Monday's print edition. You can find the latest entries at nytimes.com/diary and on our New York section online.

About

City Room®, a news blog of live reporting, features and reader conversations about New York City, has been archived. Send questions or suggestions by e-mail.